The renewed fighting in Myanmar has drawn close to the Chinese border in the past week, and Chinese media are reporting that the government of neighboring province in Yunnan is bracing for impact, moving troops to the border and preparing refugee camps to deal with an influx of refugees from the Kachin rebel-controlled areas (Kachin is the name of both the state in Myanmar and an ethnic group).The China-Myanmar border is a particularly porous one: it is common for Chinese nationals to move to towns on the Burmese side to conduct trade, while members of Myanmar’s ethnic minorities cross the border unofficially as part of their daily lives. Yesterday, for instance, The People’s Daily did a story on a woman from Myanmar who illegally crosses into China each week to take advantage of lower vegetable prices.

China has a mixed track record with refugee crises along the Yunnan border – it won moderate praise for its handling of the 2009 Kokang Incident, when it housed and fed an estimated 37,000 refugees from Burma’s Kokang region, and successfully applied pressure on participants to return to a ceasefire. Last summer, however, Human Rights Watch accused China of forcing several thousand Kachin refugees to return to a war zone in the same region that is the source of the imminent refugee crisis.

What accounts for the difference in China’s handling of Kokang and Karchin incidents? Mainly the scale of the crises and China’s perceived interests in the conflicts. Kokang, which borders the Chinese-speaking independent Wa state, is home to an enormous population of Chinese merchants who have settled in Myanmar to conduct trade – largely exporting Chinese manufactured goods and buying grey-market timber. The 2009 conflict put China in the embarrassing position of standing by as Myanmar, a near-client state of China, threatened the lives and property of Chinese nationals within a short distance of the Chinese border.

As a 2009 article by Drew Thompson reported, this was interpreted by Chinese nationalist bloggers as a display of weakness, putting it into the same category as China’s disputed territorial claims – foreign policy issues with serious domestic political consequences. (The Party sees China’s strength as a primary source of legitimacy). As such, it was handled at a very high level – Meng Jianzhu, then a member of the State Council and now head of the Party committee that oversees all internal security – was sent to Yunnan to coordinate a response to the refugee issue.

By contrast, the Kachin refugee crisis last summer was handled by the local authorities in China, implying it was a low-priority for Beijing. Preparations for the expected new wave of refugees appear to be following this model. I expect that China will, at a minimum, attempt to avoid international criticism if refugees start to arrive in large numbers, but it remains to be seen whether refugee camps will provide adequate services or offer the most basic level of assistance.

Even at a high level, the Chinese government is extremely wary of accepting refugees. Sophie Richardson, head of the China division of Human Rights Watch, told me that China fears providing too much aid to North Korean refugees out of concern it will encourage a greater flow of them. This sort of thinking may have been applied even to refugees temporarily displaced by conflict.

What will probably make the greatest difference is whether or not the current round of fighting is interpreted as an issue for China. Chinese Kachins protested at the border last Thursday, demanding that China intervene to protect their Burmese counterparts. This is unlikely to create much pressure, although you might think it would, given that when overseas Han Chinese communities are threatened, there are consistently widespread calls for the Chinese government to intervene, and the Kachin, called Jingpo in Mandarin, are one of China’s 55 recognized ethnic groups.

What is more interesting is the round of reporting in the state press about the conflict’s impact on China. When Myanmar Army shells landed on the Chinese side of the border, it provoked no serious complaints – but state media have been reporting extensively on the effect it is having on trade, including interviews with shopkeepers in border towns whose Myanmarese customers have not come since the fighting began.

Foreign Policy also has a story reporting that Chinese academics are calling for China to give up on dealing with Myanmar’s increasingly democratic-leaning government and instead throw its support wholeheartedly to the border group. It’s difficult to assess the merits of this assertion at this time, but its worth pointing out that in recent years China has a very consistent record of supporting incumbent governments and opposing separatist movements.

What may be the most important issue for Chinese leaders is dams. Foreign analysts believe that the goal of Myanmar’s campaign is to take control of the sites of proposed hydroelectric dams, unpopular with local people, but important to Chinese state-owned companies.

If finished, these dams are planned to send most of their generated power to Yunnan, providing a major source of clean energy to a government that has recently been under considerable pressure to move away from coal. The largest, the Myitsone dam, was canceled in a response to popular pressure as one of the first actions of Myanmar’s current reform-leaning president, however China is eager to see work on it resumed. So China may calculate that this round of fighting is worth tolerating, whatever its effect on China’s international reputation.